- Opendoor is in advanced talks to go public through a merger with Social Capital Hedosophia Holdings Corp. II, a “blank check”, or SPAC, company run by billionaire investor Chamath Palihapitiya, Bloomberg reported Thursday.
- Opendoor is a real estate technology company that buys homes directly from sellers, makes improvements to homes, and then resells them.
- While the deal is yet to be finalized and the deal may collapse, Bloomberg said, investors are still offering SPAC shares 7% higher in Friday trades.
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Opendoor, a real estate technology company, is in advanced talks to go public through a merger with Social Capital Hedosophia Holdings Corp. II, Bloomberg reported Thursday.
Social Capital is a “blank check”, or SPAC, company that has been looking for a tech company to acquire since it began operations in April. SPAC is led by billionaire investor Chamath Palihapitiya.
This is not the first Palihapitiya rodeo in the SPAC world. Its first foray was in 2019 when space exploration company Virgin Galactic went public through a merger with a SPAC run by Palihapitiya.
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Opendoor operates a business similar to Zillow’s relatively new home buying program. The San Francisco-based company buys homes directly from sellers, does minor repairs on the homes, and then sells them for profit.
According to his website, some of the benefits for the home seller include reduced selling costs and increased flexibility around moving and closing dates.
In its last funding round in 2019, Opendoor was valued at $ 3.8 billion. According to Bloomberg, Opendoor would be valued at around $ 5 billion in a deal with Social Capital.
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A potential deal with Opendoor could be a good time given its exposure to the housing sector. In the last few months since the start of the COVID-19 pandemic, the housing sector has experienced a business boom as city dwellers sought to escape to the suburbs after months of home orders.
The deal is expected to be announced in the coming weeks, Bloomberg said. The shares of Social Capital Hedosophia Holdings Corp. They jumped 7% in Friday trades.
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